Authority: High Court of Judicature at Bombay (Civil Appellate Jurisdiction)

Order Date: 28 August 2026

Case Overview

  • Parties: Petitioner – M/S Star Developers Through Partners; Respondents – State of Maharashtra through Ministry of Revenue and other officials.
  • Property: Land of 5,109.62 sq. metres (Survey Nos. 47/1, 47/2, 47/3) at Village Bavdhan (B.K.), Taluka Haveli, District Pune, owned by Mr. Dnyaneshwari Ashok Phadke.
  • Agreements: Development Agreement dated 27 May 2005 in favour of Mr. David Koli Pillai; Joint Venture Agreement dated 29 April 2013 between the Petitioner and Mr. David Koli Pillai for residential and commercial development. Revenue‑sharing clause: 42% to Mr. Pillai, 58% to the Petitioner (Clause 9). Clause 12(ii) defines “gross sale proceeds”. Clause 22 provides a tentative stamp‑duty calculation based on the Ready Reckoner value (2003).
  • Initial Valuation: Ready Reckoner value of Rs 7,900 per sq. metre → total market value Rs 3,25,16,400. Stamp duty paid under Article 5(g‑a) was Rs 16,26,000.
  • Subsequent Notices: Respondent No. 3 issued notice on 16 July 2015 demanding deficit stamp duty of Rs 22,62,625; a second notice on 30 July 2015. Petitioner replied on 20 August 2015.
  • Writ Petition: Petitioner filed Writ Petition No. 5079 of 2016; decided on 4 May 2016 with direction to decide within six weeks.
  • Re‑valuation Order (7 May 2016): Respondent No. 3 re‑valued the property at Rs 8,26,33,500 applying Clause 5(g)(a) of Schedule I, 4% stamp duty → Rs 33,05,340. After credit for the earlier Rs 16,26,000, deficit stamp duty was Rs 16,79,340. A penalty of 2% plus other charges was imposed.
  • Appeal: Petitioners appealed (Appeal No. 30 of 2016) before Respondent No. 2; judgment and order dated 3 Nov 2017 upheld the re‑valuation and deficit.
  • Petitioner’s Submissions: Alleged non‑application of Section 32A(5); argued that “Joint Venture” provision entered into force only on 24 April 2015, so the 2013 agreement should be valued under Article 25 (Conveyance) or the residuary provision Article 5(h)(b) (Rs 100). Contended that the authority’s calculation (5,109.62 × 0.42 × 45,300 × 0.85 = Rs 8,26,33,285) was hypothetical, that revenue‑share is not consideration, that the Ready Reckoner is merely a guide, and that the land’s land‑locked status and pending litigation should reduce value. Also raised CAG’s jurisdictional limits.
  • Respondents’ Submissions: Asserted long‑standing practice of valuing based on revenue‑share, clarified by ASR Guidelines 2015. Stated that the instrument is a Development Agreement; market value must consider the consideration stated in the instrument per Section 2(na). Noted that notices were issued, penalty under Section 39 is proper, and Section 32A(5) permits action on any information.
  • Court’s Analysis:
  • Interpreted Article 5(g‑a) to apply based on substance, not label; the agreement grants development rights to the developer and the owner’s 42% share of gross sale proceeds is consideration.
  • Referred to Kolte Patil Developers Ltd. judgment confirming that revenue‑sharing constitutes consideration for development rights.
  • Applied Section 2(na): higher of open‑market value and consideration stated in the instrument. The authority’s calculation using ASR rate for residential flats (Rs 45,300 per sq. m) and deferment factor 0.85 yielded consideration Rs 82,633,285.60, rounded to Rs 82,633,500.
  • Determined stamp duty at 4% → Rs 33,05,340; after credit, deficit Rs 16,79,340; penalty of 2% upheld.
  • Rejected petitioner’s arguments on lack of guideline in 2013, on “Joint Venture” terminology, on land‑locked status, and on CAG jurisdiction, finding the statutory provisions sufficient.

Final Outcome

  • Petition dismissed.
  • Judgment and Order dated 3 Nov 2017 (Appeal No. 30 of 2016) upheld.
  • Order dated 7 May 2016 under Section 32A of the Maharashtra Stamp Act, determining deficit stamp duty, upheld.
  • Deficit stamp duty of Rs 16,79,340 and applicable 2% penalty remain payable.
  • No order as to costs; rule discharged; pending interlocutory applications deemed infructuous.

Topics: Stamp Duty, Revenue‑Sharing Valuation, Real Estate Development